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State Employment Agencies and Labour Market Efficiency

Nick Adnett ()

Cambridge Journal of Economics, 1987, vol. 11, issue 3, 183-96

Abstract: Responding to recent reduced expenditure on state employment agencies, this paper reexamines their economic rationale. Current search theory is inappropriate for analyzing the behavior of most job searchers and evidence is presented which indicates the importance o f the extended internal labor market in the job-matching process. Sel f-directed search will be ineffective for those with poor access to t hese informal hiring channels. The case is then developed for the req uirement that employers register vacancies with the employment agency. Empirical support for this is provided by a study of the operation of the British labor market in the 1950s. Copyright 1987 by Oxford University Press.

Date: 1987
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